Credit Card Blocking

Credit cardholders often provide in advance their credit card number to a merchant, company or business, for future transaction, which may or may not occur. For example: When checking into a hotel or renting a car, the receptionists may ask for a credit number to placed on file, and then to be applied to the final bill. The merchant could contact the credit card company, and provide an estimate amount of the total bill. If permissible by the credit card company, the merchant has the estimate amount “blocked”, even though no charge has been applied to the card (debit or credit), and that amount may not be charged, if the transactions, does not proceed. Also, some restaurants use the service of “blocking,” a credit card, when a large number attend a party or dinner event. The purpose of “blocking” ensures the merchant will get paid if the customer or client relinquishes, from paying the final bill or ensures the merchant will get paid, preventing the cardholder from exceeding the credit limit, before checking out of a hotel, returning a rental car or other similar type of transaction. Unfortunately, credit cardholder may encounter a problem, when making a future purchase, with that card. Unknowingly, the cardholder may have reached their credit limit on the card, since an amount on the card was ‘blocked,” for possible future credit card transaction. Some credit card companies will allow the credit cardholder to exceed their limit, but on the next credit card statement, an additional fee or punitive charge would be included.

Preventive methods, avoids reaching your maximum credit card limit or fewer number of days the credit card is “blocked.” Calculate the maximum amount available on the credit or debit card you plan on using, and then subtract expected ‘block’ amount, for those merchant transactions. Ask the merchant (hotel, car rental company or other business), how long the card will be blocked and amount. Have at least two credit cards available. One applied for “block” transactions and the other one, for all other transactions. This ensures your ability to make credit card purchases. Remember to use the same credit card to pay a bill that was ‘blocked,” by that merchant. Within a few days, the blocked amount will be removed from the credit card. When the bill or charge is paid by a different credit card, cash or check, then the length of time to remove the “blocked” amount will take longer, possibly up to fifteen days. The credit card company, will not likely have been notified the amount was paid and the keep on their records the ‘blocked” amount for a longer time. This can be avoided, by asking the clerk, receptionists or merchant to notify your credit card company, to remove their “block” promptly. Afterwards, contact the credit card issuer, if the “block” was removed. When applying for a credit or debit card, ask the issuer if “blocking” is permitted, and what type of merchants will the credit card company accept to place a “block.” The Federal Trade Commission brochure, “Credit Card Blocking,” recommends that consumer check how long their card issuer block credit lines for these types of transactions.

Apply to a credit card monitoring service, provides constant updates for credit card transactions, includes being informed when “blocking” happens, and alerts for possible fraud or theft.

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